DeM Banter: Ah yes…the dreaded… “You’re Fired” e-SSS (Staff Summary Sticky), I thought it was a joke…maybe not…???
What’s the one factor that most affects how satisfied, engaged, and committed you are at work? All of our research over the years points to one answer — and that’s the answer to the question: “Who is your immediate supervisor?”
Quite simply, the better the leader, the more engaged the staff. Take, for example, results from a recent study we did on the effectiveness of 2,865 leaders in a large financial services company. You can see a straight-line correlation here between levels of employee engagement and our measure of the overall effectiveness of their supervisors (as judged not just by the employees themselves but by their bosses, colleagues, and other associates on 360 assessments). So, as you can see at the low end, the satisfaction, engagement, and commitment levels of employees toiling under the worst leaders (those at or below the 10th percentile) reached only the 4th percentile. (That means 96% of the company’s employees were more committed than those mumbling, grumbling, unhappy souls.) At the other end, the best leaders (those in the 90th percentile) were supervising the happiest, most engaged, most committed employees — those happier than more than 92% of their colleagues.
This study is by no means unusual. We’ve seen the same pattern in the U.S., the U.K., the Netherlands, Spain, United Arab Emirates, and India. We’ve seen it in financial services, manufacturing, high-tech, government, universities, hospitals, food service, oil, and every other industry we’ve studied. We’ve seen it in organizations employing 225,000 people and 250.
And we’re not the only ones who’ve seen it: In a recent article, Jim Clifton, the CEO of the Gallup organization, found that 60% of employees working for the U.S. federal government are miserable — not because of low pay, poor workplace benefits, or insufficient vacation days — but because they have bad bosses. He goes so far as to report a silver-bullet fix to this situation: “Just name the right manager. No amount of pay and benefits will solve the problems created by a manager who has no talent for the task at hand.”
This matters so much for two very basic reasons.
Bad Bosses Negate Other Investments: As Clifton points out, none of the other expensive programs a company institutes to increase employee engagement — excellent rewards, well-thought-out career paths, stimulating work environments, EAP programs, health insurance, and other perks — will make much difference to the people stuck with bad bosses.
Good Bosses Lead Employees to Increase Revenue: And, as many other studies have shown, there’s a strong correlation between employee engagement, customer satisfaction, and revenue.
To take just one example, in the first of many such studies, published more than 15 years ago in HBR, Anthony Rucci, Steven Kirn, and Richard Quinn identified “the employee-customer-profit chain” at Sears. This was a straightforward dynamic in which employee behavior affected customer behavior, which in turn affected company financial performance. Specifically, in Sears’ case, when employee satisfaction improved by 5%, customer satisfaction improved by 1.3%, which led to a .05% improvement in revenue. That might not sound significant, but for $50 billion Sears, that that came to an extra $250 million in sales revenue.
This study has since been replicated by J.C. Penny, Best Buy, and Marriott. And for all of them the results held true — effective leaders led to satisfied employees, which led to satisfied customers, which led to a direct and measurable increase in sales revenue.
Put all of these studies together, and to us the implications are clear. Investing in leadership development not only pays off, it’s a prerequisite to getting the most out of your other investments in workplace effectiveness and the most from your top line.